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Abu Dhabi, UAETuesday 23 October 2018

Libya curtails black market with 183% currency trading fee

Black market rates have squeezed liquidity and fueled inflation in the North African nation

A currency counting machine counts Libyan dinars at a currency exchange office in Tripoli. Libya introduced a raft of measures Wednesday to boost its struggling economy. Reuters
A currency counting machine counts Libyan dinars at a currency exchange office in Tripoli. Libya introduced a raft of measures Wednesday to boost its struggling economy. Reuters

Libya’s UN-backed government has imposed a 183 per cent fee on foreign currency transactions in an effort to narrow the gap between the official and black market rates that’s squeezed liquidity and fueled inflation in the North African nation.

The move, announced Wednesday in a statement from the Tripoli-based Presidency Council, is part of a package of measures that include a subsidy reform program.

Libya has struggled to revive its economy amid conflicts between rival militias, parallel governments and repeated disruptions to crude oil exports. The dinar’s exchange rate on the black market is about 6.2 to the US dollar compared with the official rate of about 1.4 per dollar.

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Libyan central bank governor Sadiq Al-Kabir and other officials agreed at a US-organized meeting in Tunisia earlier this year on an economic reform plan that includes devaluing the dinar and raising fuel prices.

The UN Support Mission in Libya welcomed the move. “The UN hopes that these reforms improve the livelihoods of Libyans across the country,” it said in a statement on Twitter.